Bandwidth (NASDAQ:BAND) Shares Down 10.6% – Here’s Why

Bandwidth Inc. (NASDAQ:BAND) shares dropped 10.6% during trading on Friday. The stock traded as low as $45.05 and last traded at $47.4580. Approximately 423,250 shares traded hands during mid-day trading, a decline of 52% from the average daily volume of 881,128 shares. The stock had previously closed at $53.11.

Key Bandwidth News

Here are the key news stories impacting Bandwidth this week:

• Positive Sentiment: Bandwidth reported third-quarter revenue of $234.0 million, up 22% year over year and slightly above estimates. Adjusted EBITDA rose 43% to $34.8 million, while the company generated $33.0 million in free cash flow and returned to GAAP profitability. Bandwidth Announces Third Quarter 2026 Financial Results
• Positive Sentiment: Adjusted earnings of $0.50 per share exceeded the $0.47 consensus estimate, and revenue also topped expectations modestly. Results compared favorably with $0.36 per share in the prior-year quarter. Bandwidth Q3 Earnings and Revenues Beat Estimates
• Positive Sentiment: Management reaffirmed 2026 revenue guidance of $905 million to $910 million and adjusted EBITDA guidance of $124 million to $125 million. It also expects double-digit Cloud Communications growth in 2027, supported by voice-usage demand. An analyst cited accelerating net revenue retention and maintained a Buy rating. Bandwidth: Full Steam Ahead As Net Revenue Retention Soars
• Neutral Sentiment: Bandwidth amended its credit agreement and expanded its board with Chip Schroeder, a former Silver Lake managing director. The changes may improve financial flexibility and governance, but no immediate earnings impact was indicated. Bandwidth Appoints Chip Schroeder to Board of Directors
• Negative Sentiment: The key disappointment was guidance that was reaffirmed rather than raised. After BAND’s sharp rally, investors may have been expecting a stronger forecast, making the otherwise modest quarterly beats insufficient to support the valuation. Bandwidth Sinks on In-Line Guidance Despite Q3 Beat
• Negative Sentiment: Reported insider-trading data showed selling by multiple executives and directors, with no open-market purchases during the past six months. Although such sales may be compensation-related, the pattern can weigh on sentiment at a high-growth company.

Wall Street Analysts Forecast Growth

Several research firms have recently issued reports on BAND. Wall Street Zen raised Bandwidth from a “hold” rating to a “buy” rating in a research note on Saturday, October 17th. Piper Sandler raised their price objective on shares of Bandwidth from $38.00 to $52.00 and gave the company a “neutral” rating in a research note on Wednesday, August 19th. Weiss Ratings downgraded shares of Bandwidth from a “hold (c)” rating to a “sell (d+)” rating in a report on Friday, October 23rd. Zacks Research cut Bandwidth from a “strong-buy” rating to a “hold” rating in a report on Friday, July 3rd. Finally, Citigroup reaffirmed a “market outperform” rating on shares of Bandwidth in a research note on Friday. Four investment analysts have rated the stock with a Buy rating, four have assigned a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat, Bandwidth presently has an average rating of “Hold” and a consensus target price of $59.43.

Bandwidth Price Performance

The firm has a market capitalization of $1.49 billion, a price-to-earnings ratio of -161.00, a PEG ratio of 4.32 and a beta of 3.01. The company has a debt-to-equity ratio of 0.87, a current ratio of 2.04 and a quick ratio of 2.04. The stock’s 50 day moving average price is $51.56 and its two-hundred day moving average price is $40.58.

Bandwidth (NASDAQ:BAND) last announced its quarterly earnings data on Thursday, October 29th. The company reported $0.50 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.47 by $0.03. Bandwidth had a net margin of 0.27% and a return on equity of 1.85%. The business had revenue of $234.02 million for the quarter, compared to the consensus estimate of $233.15 million. The company’s revenue was up 21.9% on a year-over-year basis. On average, equities research analysts anticipate that Bandwidth Inc. will post 0.64 EPS for the current year.

Insider Buying and Selling at Bandwidth

In related news, General Counsel Richard Asbill sold 1,832 shares of the stock in a transaction dated Monday, August 31st. The shares were sold at an average price of $49.15, for a total value of $90,042.80. Following the completion of the sale, the general counsel owned 7,550 shares in the company, valued at approximately $371,082.50. This trade represents a 19.53% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CFO Daryl Raiford sold 4,673 shares of the stock in a transaction dated Monday, August 31st. The shares were sold at an average price of $49.15, for a total transaction of $229,677.95. Following the completion of the sale, the chief financial officer owned 35,832 shares of the company’s stock, valued at approximately $1,761,142.80. The trade was a 11.54% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 25,050 shares of company stock valued at $1,228,342 in the last three months. Company insiders own 5.26% of the company’s stock.

Institutional Trading of Bandwidth

A number of hedge funds have recently modified their holdings of BAND. State of Alaska Department of Revenue grew its holdings in shares of Bandwidth by 43.1% during the 3rd quarter. State of Alaska Department of Revenue now owns 1,262 shares of the company’s stock worth $76,000 after purchasing an additional 380 shares in the last quarter. Sterling Capital Management LLC lifted its position in Bandwidth by 850.0% in the third quarter. Sterling Capital Management LLC now owns 988 shares of the company’s stock worth $60,000 after purchasing an additional 884 shares during the period. TD Waterhouse Canada Inc. bought a new position in Bandwidth in the second quarter worth $70,000. Integrated Wealth Concepts LLC acquired a new stake in Bandwidth during the second quarter worth $94,000. Finally, Simplicity Wealth LLC bought a new stake in Bandwidth in the 3rd quarter valued at $202,000. Institutional investors own 68.53% of the company’s stock.

About Bandwidth

Bandwidth Inc (NASDAQ:BAND) is a cloud communications company that provides application programming interfaces (APIs) and related network services for integrating voice, messaging and emergency communications into software applications. Its platform is designed for businesses, communications providers and technology companies that need to build communications capabilities into customer-facing products and internal workflows.

The company’s offerings include programmable voice, text messaging and toll-free messaging services, as well as emergency calling capabilities through its E911 solution.